Funding for the Swiss armed forces is being increased, partly financed by cuts to international cooperation. That was the outcome of the winter session of parliament following some heated and drawn-out debate.
Shortly before Christmas, the federal budget was finalised for 2025. It envisages expenditure of 86.5 billion Swiss francs and revenue of 85.7 billion. The debt brake in the constitution allows this shortfall for economic reasons. Three weeks of wrangling between the National Council and the Council of States preceded the final outcome. One particularly thorny issue was determining by how much to finance the increase in defence expenditure through cuts to international cooperation, i.e. development aid, contributions to multilateral organisations and economic cooperation.
The debate also centred on Switzerland’s role in an uncertain world (see quotes). The majority position is to increase the defence budget to 1 per cent of gross domestic product (GDP). There was disagreement over the timeline: the federal government is looking at 2035, but parliament wants to make it three years sooner. The outcome was 530 million francs more for defence in this year’s budget than the Federal Council had envisaged, a total of 6.3 billion.
The conservative majority in the National Council initially wanted to cut 250 million francs, almost half of the additional funds earmarked for the armed forces, from international cooperation. Even the frugal Minister of Finance Karin Keller-Sutter warned that such a drastic reduction would jeopardise development aid projects. The Council of States brought the sum down to 30 million and stood firm on offsetting the extra defence expenditure due to the debt brake and bleak financial outlook. Both chambers agreed on a compromise to offset the difference: a 110 million franc cut in international cooperation.
Additional cuts are also planned in other areas, including federal staff. Calls to generate additional revenue in addition to making budget cuts were rejected. The conservative parties SVP, FDP and the Centre were in favour of the 2025 budget; the centre-left parties, namely the SP and Greens were against. In February, the next round of the fiscal controversy will start. There are pending structural deficits from 2027, which is why the Swiss government will send a restructuring package for the federal budget for consultation, based on proposals by an expert group.
“We have been sending billions of tax money abroad for decades. After the Berlin wall came down, this parliament assumed the peace would last for ever. That has come back to bite us.” Lars Guggisberg (SVP/BE)
“We can’t just allocate an extra half a billion francs to the armed forces without knowing what the money will be used for.” Tamara Funiciello (SP/BE)
“The peace dividend has been spent abroad in past years. Now Switzerland’s first priority is to get its own house in order.” Peter Schilliger (FDP/LU)
“It’s wrong to add half a billion to the defence budget and jeopardise Switzerland’s humanitarian tradition at the same time.” Corina Gredig (GLP/ZH)
“For a small, neutral country like Switzerland, a global policy of peace is the best security policy; it’s irresponsible to neglect that.” Gerhard Andrey (the Greens/FR)
“Look at what’s going in the world. The debt crisis is everywhere. Financially challenged states are also militarily challenged. The importance of the debt brake cannot be overstated.” Benedikt Würth (the Centre/SG
More on the topic of federal finances: Billions at stake in the federal budget from Swiss Review 5/24 October.
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